Retiring with $500,000 in superannuation or savings is achievable for many Australians, especially if you own your home and don’t plan to live extravagantly. With the right strategy, $500K can support a modest to moderate retirement — but you’ll need to budget, invest smartly, and potentially lean on the Age Pension later on.
How Long Will $500K Last in Retirement?
Here’s an estimate of how long your $500K could last, based on different spending levels and moderate investment returns (~2.4% real return):
| Annual Spending | Estimated Longevity |
|---|---|
| $30,000 | ~17–20 years |
| $40,000 | ~13–16 years |
| $50,000 | ~10–13 year |
What Kind of Retirement Can You Expect?
According to the ASFA Retirement Standard:
- Modest retirement (single): ~$32,000/year
- Comfortable retirement (single): ~$51,000/year
With $500K:
- A modest lifestyle is very achievable
- A comfortable lifestyle might be possible short-term, or with Age Pension support later
- If you own your home and are frugal, it may stretch even further
What About the Age Pension?
At age 67, you may become eligible for the Age Pension depending on your assets. As your $500K balance declines:
- You may qualify for part payments after a few years
- Eventually, you could receive the full Age Pension, currently around $28,500/year for singles (2024 rates)
Combining super + part-pension later on is a common and effective strategy.
How to Make $500K Work for Retirement
✅ 1. Draw Your Income Tax-Free
Once you’re over 60, converting your super to an account-based pension allows tax-free withdrawals.
✅ 2. Invest in a Balanced Portfolio
A mix of income and growth assets can help you outpace inflation without too much risk.
✅ 3. Stick to a Sustainable Withdrawal Rate
Aim for around 4–5% annually to avoid depleting your balance too soon.
✅ 4. Use a Transition to Retirement (TTR) Strategy
If you’re still working part-time, TTR can supplement your income while preserving super.
✅ 5. Be Strategic About Spending
Track expenses, avoid unnecessary debt, and prioritise healthcare, housing, and essentials.
Pros and Cons of Retiring on $500K
| ✅ Pros | ❌ Cons |
|---|---|
| Enough for modest living | Won’t support lavish lifestyle |
| May qualify for Age Pension later | Risk of outliving savings without planning |
| Tax-free income over 60 | Not enough if you’re renting or have debt |
Bonus Tip: Homeownership Matters
If you own your home outright, you’ll need less income overall — making $500K stretch further.
But if you’re still renting, you may need a larger balance or extra support (like downsizing or government housing assistance).
✅ Final Verdict: Can You Retire on $500K?
Yes, you can retire on $500K — especially if:
- You’re over 60 and debt-free
- You own your home
- You live modestly and plan for Age Pension access later
- You manage your withdrawals and investments wisely
Many Australians retire with less than this and live well — the key is to plan early and adjust expectations.